FISERV INC

Previous wording

•Results of operations. This section contains an analysis of our results of operations presented in the accompanying unaudited consolidated statements of income by comparing the results for the three months ended March 31, 2024 to the comparable period in 2023.

Current wording

•Results of operations. This section contains an analysis of our results of operations presented in the accompanying unaudited consolidated statements of income by comparing the results for the three and six months ended June 30, 2024 to the comparable periods in 2023.

Previous wording

Effective for the three months ended March 31, 2024, we realigned our reportable segments to correspond with changes in our business designed to further enhance operational performance in the delivery of our integrated portfolio of products and solutions to our financial institution clients (the “Segment Realignment”). Our new reportable segments are the Merchant Solutions (“Merchant”) segment and the Financial Solutions (“Financial”) segment. Segment results for the three months ended March 31, 2023 have been recast to reflect the Segment Realignment.

Current wording

Effective in the first quarter of 2024, we realigned our reportable segments to correspond with changes in our business designed to further enhance operational performance in the delivery of our integrated portfolio of products and solutions to our financial institution clients (the “Segment Realignment”). Our new reportable segments are the Merchant Solutions (“Merchant”) segment and the Financial Solutions (“Financial”) segment. Segment results for the three and six months ended June 30, 2023 have been recast to reflect the Segment Realignment.

Previous wording

Additionally, there are numerous software-as-a-service (“SaaS”) solution providers in the industry, many of which have chosen to integrate merchant acquiring into their software as a way to generate revenue from existing client relationships. Such providers are independent software vendors, typically referred to as ISVs, and we believe there are numerous potential distribution partnership opportunities to cross-sell multiple value-added solutions available to us.

Current wording

Additionally, there are numerous software-as-a-service solution providers in the industry, many of which have chosen to integrate merchant acquiring into their software as a way to generate revenue from existing client relationships. Such providers are independent software vendors, typically referred to as ISVs, and we believe there are numerous potential distribution partnership opportunities to cross-sell multiple value-added solutions available to us.

Previous wording

Financial institutions must now be able to serve their customers with tailored solutions, delivered how and when those customers want. This requires financial institutions to not only process their transactions, but to integrate their products and services to give customers easy access to such integrated solutions, when they need it. Financial institutions are striving for this single, integrated view of a customer’s activity. We believe that the integration of our products and services creates a compelling value proposition for our clients by providing, among other things, new sources of revenue and opportunities to reduce their costs. We have invested in integrating our platforms and value-added solutions to make it easy for a client to buy across our full product suite.

Current wording

Financial institutions must be able to serve their customers with tailored solutions, delivered how and when those customers want. In addition, financial institutions are striving for this single, integrated view of a customer’s activity. This requires financial institutions to not only process customer transactions, but to integrate financial institutions’ products and services to give customers easy access to integrated solutions. We believe that the integration of our products and services creates a compelling value proposition for our clients by providing, among other things, new sources of revenue and opportunities to reduce their costs. We have invested in integrating our platforms and value-added solutions to make it easy for a client to buy across our full product suite.

Previous wording

Global macroeconomic conditions, including rising interest rates, inflation, bank failures, disruptions in the global supply chain, changes in consumer spending, the effects of international hostilities and regulations restricting trade or impacting our ability to offer products or services, could have a material adverse effect on our business, results of operations and financial condition. In recent years, we have observed increased shortages and delays in the global supply chain for components and inputs necessary to our businesses, such as point-of-sale devices, semiconductors, paper and plastic, and may experience difficulty procuring those components and inputs in the future on a timely basis or at historical prices. Personal consumption and consumer savings growth in the U.S. may also negatively impact our business and financial results. We actively monitor and manage our business in response to these unpredictable geopolitical and market conditions, as they may adversely impact our operations and financial results.

Current wording

Global macroeconomic conditions, including rising interest rates, inflation, disruptions in the global supply chain, changes in consumer spending, the effects of international hostilities, political conditions, and regulations restricting trade or impacting our ability to offer products or services, could have a material adverse effect on our business, results of operations and financial condition. Personal consumption and consumer savings growth in the U.S. may also negatively impact our business and financial results. We actively monitor and manage our business in response to these unpredictable geopolitical and market conditions, as they may adversely impact our operations and financial results.

Previous wording

In addition, our operating results in certain foreign countries in which we operate may be adversely impacted by fluctuations in exchange rates for currencies other than the U.S. dollar, including the Euro, British Pound Sterling and Argentine Peso. The strengthening of the U.S. dollar against certain foreign currencies in countries in which we operate would negatively impact our revenue and earnings. We also have exposure to risks related to currency devaluation in certain countries, which may negatively impact our international operating results if there is a prolonged devaluation of local currencies relative to the U.S. dollar or if the economic conditions in these countries decline. While the majority of our revenue is earned domestically, we actively monitor the foreign exchange rate environment in an effort to manage these risks.

Current wording

In addition, our operating results in certain foreign countries in which we operate may be adversely impacted by fluctuations in exchange rates for currencies other than the U.S. dollar, including the Euro, British Pound Sterling and Argentine Peso. The strengthening of the U.S. dollar against certain foreign currencies in countries in which we operate would negatively impact our revenue and earnings. We also have exposure to risks related to currency devaluation in certain countries, which may negatively impact our international operating results if there is a prolonged devaluation of local currencies relative to the U.S. dollar or if the economic conditions in these countries decline. While the majority of our revenue is earned domestically, we actively monitor the foreign exchange rate environment and may enter into derivative instruments and utilize other non-derivative hedging instruments with creditworthy institutions in an effort to manage these risks.

Previous wording

The operations of our Argentina subsidiary are experiencing higher interest rates and higher inflation as compared to historical averages. The anticipated benefits of higher transitory revenue from above-average interest and inflation may be offset in whole or in part by, or may be less than, foreign currency exchange losses related to a significant devaluation of the Argentine Peso.

Current wording

The operations of our Argentina subsidiary are experiencing higher interest rates and inflation as compared to historical averages. The anticipated benefits of higher transitory revenue from above-average interest and inflation may be offset in whole or in part by, or may be less than, foreign currency exchange losses related to a significant devaluation of the Argentine Peso.

Previous wording

Our consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the U.S., which require management to make estimates, judgments and assumptions that affect the reported amount of assets, liabilities, revenue and expenses. In our Annual Report on Form 10-K for the year ended December 31, 2023, we identified our critical accounting policies and estimates. We continually evaluate the accounting policies and estimates that we use to prepare our consolidated financial statements, including for recently adopted accounting pronouncements, and base our estimates on historical experience and assumptions that we believe are reasonable in light of current circumstances. Actual amounts and results could differ materially from these estimates. For example, we estimate the fair values of identifiable assets acquired and liabilities assumed in connection with acquisitions and may record purchase accounting adjustments during the measurement period, which may be up to one year from the acquisition date. Additionally, we review the carrying value of goodwill for impairment by comparing the estimated fair value of our reporting units to their carrying values. Determining the fair value of a reporting unit involves judgement and the use of significant estimates and assumptions, which include assumptions regarding the revenue growth rates and operating margins used to calculate estimated future cash flows, risk-adjusted discount rates, and future economic and market conditions. There have been no material changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

Our unaudited consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the U.S., which require management to make estimates, judgments and assumptions that affect the reported amount of assets, liabilities, revenue and expenses. In our Annual Report on Form 10-K for the year ended December 31, 2023, we identified our critical accounting policies and estimates. We continually evaluate the accounting policies and estimates that we use to prepare our consolidated financial statements, including for recently adopted accounting pronouncements, and base our estimates on historical experience and assumptions that we believe are reasonable in light of current circumstances. Actual amounts and results could differ materially from these estimates. For example, we estimate the fair values of identifiable assets acquired and liabilities assumed in connection with acquisitions and may record purchase accounting adjustments during the measurement period, which may be up to one year from the acquisition date. Additionally, we review the carrying value of goodwill for impairment by comparing the estimated fair value of our reporting units to their carrying values. Determining the fair value of a reporting unit involves judgement and the use of significant estimates and assumptions, which include assumptions regarding the revenue growth rates and operating margins used to calculate estimated future cash flows, risk-adjusted discount rates, and future economic and market conditions. There have been no material changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

Previous wording

The following table presents certain amounts included in our consolidated statements of income, the relative percentage that those amounts represent to revenue and the change in those amounts from year to year. This information should be read together with the unaudited consolidated financial statements and accompanying notes. The unaudited financial results presented below have been affected by acquisitions, dispositions, and foreign currency fluctuations. Segment results for the three months ended March 31, 2023 have been recast to reflect the Segment Realignment.

Current wording

The following table presents certain amounts included in our consolidated statements of income, the relative percentage that those amounts represent to revenue and the change in those amounts from year to year. This information should be read together with the unaudited consolidated financial statements and accompanying notes. The unaudited financial results presented below have been affected by acquisitions, dispositions, and foreign currency fluctuations. Segment results for the three and six months ended June 30, 2023 have been recast to reflect the Segment Realignment.

Previous wording

Total revenue increased $336 million, or 7%, in the first quarter of 2024 compared to 2023. The revenue increase was driven by higher global processing revenue, partially offset by an 11% decrease due to foreign currency exchange rate fluctuations in the first quarter of 2024.

Current wording

Total revenue increased $351 million, or 7%, in the second quarter of 2024 and increased $687 million, or 7%, in the first six months of 2024 compared to 2023. The revenue increase was driven by higher global processing revenue in both our Merchant and Financial segments, partially offset by a 9% and 10% decrease due to foreign currency exchange rate fluctuations in the second quarter and first six months of 2024, respectively.

Previous wording

Revenue in our Merchant segment increased $257 million, or 13%, in the first quarter of 2024 compared to 2023. In the first quarter of 2024, Small Business contributed 10% to segment revenue growth, driven by an increase in payment and transaction volume, partially offset by foreign currency exchange rate fluctuations. Small Business revenue growth also includes contributions from our Clover operating system and the expansion of our merchant relationships through value-added services. Additionally, Enterprise and Processing each contributed 1% to Merchant segment revenue growth.

Current wording

Revenue in our Merchant segment increased $204 million, or 9%, in the second quarter of 2024 and increased $461 million, or 11%, in the first six months of 2024 compared to 2023. In the second quarter and first six months of 2024, Small Business contributed 8% and 9% to segment revenue growth, respectively, driven by an increase in payment and transaction volume, partially offset by foreign currency exchange rate fluctuations. Small Business revenue growth also includes contributions from our Clover operating system and the expansion of our merchant relationships through value-added services. Additionally, Enterprise contributed 2% in both the second quarter and first six months of 2024, primarily driven by transaction growth, while Processing negatively impacted Merchant segment revenue growth by 1% in the second quarter of 2024.

Previous wording

Revenue in our Financial segment increased $62 million, or 3%, in the first quarter of 2024 compared to 2023. In the first quarter of 2024, Digital Payments contributed 2% to segment revenue growth, primarily driven by an increase in transaction volume, while Issuing contributed 1% to segment growth, primarily driven by an increase in active accounts. Banking partially offset Financial segment revenue growth by 1% due to a decrease in license and termination fee revenue in the first quarter of 2024 compared to the first quarter of 2023.

Current wording

Revenue in our Financial segment increased $134 million, or 6%, in the second quarter of 2024 and increased $196 million, or 4%, in the first six months of 2024 compared to 2023. Digital Payments contributed 3% to segment revenue growth in both the second quarter and first six months of 2024, primarily driven by an increase in transaction volume and new client wins. Issuing contributed 2% and 1% to segment growth in the second quarter and first six months of 2024, respectively, primarily driven by an increase in active accounts, primarily in our international regions, while Banking contributed 1% in the second quarter of 2024.

Previous wording

Revenue at Corporate and Other increased $17 million, or 5%, in the first quarter of 2024 compared to 2023, primarily due to increased postage revenue.

Current wording

Revenue at Corporate and Other increased $13 million, or 4%, in the second quarter of 2024 and increased $30 million, or 5%, in the first six months of 2024 compared to 2023, primarily due to increased postage revenue.

Previous wording

Total expenses increased $89 million, or 2%, in the first quarter of 2024 compared to 2023. Total expenses as a percentage of total revenue decreased 370 basis points to 75.8% in the first quarter of 2024 compared to 2023. Total expenses as a percentage of total revenue were favorably impacted by operating leverage across our various businesses, as well as a reduction in amortization of acquisition-related intangible assets and acquisition and integration related expenses of approximately 120 basis points and 20 basis points, respectively.

Current wording

Total expenses increased $54 million, or 1%, in the second quarter of 2024 and $143 million, or 2%, in the first six months of 2024 compared to 2023. Total expenses as a percentage of total revenue decreased 420 basis points to 72.0% in the second quarter of 2024 and 390 basis points to 73.9% in the first six months of 2024 compared to 2023. Total expenses as a percentage of total revenue were favorably impacted by operating leverage across our various businesses, as well as a reduction in amortization of acquisition-related intangible assets of approximately 120 basis points in both the second quarter and first six months of 2024.

Previous wording

Cost of processing and services as a percentage of processing and services revenue decreased to 33.9% in the first quarter of 2024 compared to 38.3% in the first quarter of 2023. Cost of processing and services as a percentage of processing and services revenue was favorably impacted by strong operating leverage accompanying scalable revenue growth.

Current wording

Cost of processing and services as a percentage of processing and services revenue decreased to 32.4% in the second quarter of 2024 compared to 34.4% in the second quarter of 2023 and decreased to 33.1% in the first six months of 2024 compared to 36.3% in the first six months of 2023. Cost of processing and services as a percentage of processing and services revenue was favorably impacted by strong operating leverage accompanying scalable revenue growth in the second quarter and first six months of 2024.

Previous wording

Cost of product as a percentage of product revenue increased to 73.7% in the first quarter of 2024 compared to 68.6% in the first quarter of 2023. The cost of product as a percentage of product revenue in the first quarter of 2024 was impacted by revenue mix.

Current wording

Cost of product as a percentage of product revenue decreased to 66.1% in the second quarter of 2024 compared to 69.5% in the second quarter of 2023 and increased to 69.7% in the first six months of 2024 compared to 69.1% in the first six months of 2023. The cost of product as a percentage of product revenue in the second quarter and first six months of 2024 was impacted by revenue mix, including an increase in high margin license revenue in the second quarter of 2024 compared to 2023.

Previous wording

Selling, general and administrative expenses as a percentage of total revenue decreased to 34.8% in the first quarter of 2024 compared to 35.3% in the first quarter of 2023. Selling, general and administrative expenses as a percentage of total revenue was favorably impacted by a reduction in amortization of acquisition-related intangible assets and acquisition and integration related expenses of approximately 90 basis points and 40 basis points, respectively, partially offset by an increase in payments to our distribution partners.

Current wording

Selling, general and administrative expenses as a percentage of total revenue decreased to 33.2% in the second quarter of 2024 compared to 35.7% in the second quarter of 2023 and decreased to 34.0% in the first six months of 2024 compared to 35.5% in the first six months of 2023. Selling, general and administrative expenses as a percentage of total revenue was favorably impacted by a reduction in amortization of acquisition-related intangible assets of approximately 90 basis points in both the second quarter and first six months of 2024, as well as a reduction in acquisition and integration related expenses of approximately 20 basis points and 30 basis points in the second quarter and first six months of 2024, respectively.

Previous wording

Total operating income increased $247 million, or 26%, in the first quarter of 2024 compared to 2023. Total operating margin increased 370 basis points to 24.2% in the first quarter of 2024 compared to 2023. Total operating income and total operating margin benefited from scalable revenue growth, along with a reduction in amortization of acquisition-related intangible assets.

Current wording

Total operating income increased $297 million, or 26%, in the second quarter of 2024 and increased $544 million, or 26%, in the first six months of 2024 compared to 2023. Total operating margin increased 420 basis points to 28.0% in the second quarter of 2024 and increased 390 basis points to 26.1% in the first six months of 2024 compared to 2023. Total operating income and total operating margin benefited from scalable revenue growth, along with a reduction in amortization of acquisition-related intangible assets.

Previous wording

Operating income in our Merchant segment increased $177 million, or 30%, in the first quarter of 2024 compared to 2023. Operating margin increased 440 basis points to 34.1% in the first quarter of 2024 compared to 2023. Operating income and operating margin growth in our Merchant segment was primarily due to operating leverage and productivity.

Current wording

Operating income in our Merchant segment increased $137 million, or 18%, in the second quarter of 2024 and increased $314 million, or 23%, in the first six months of 2024 compared to 2023. Operating margin increased 290 basis points to 36.6% in the second quarter of 2024 and increased 360 basis points to 35.4% in the first six months of 2024 compared to 2023. Operating income and operating margin growth in our Merchant segment was primarily due to operating leverage and productivity.

Previous wording

Operating income in our Financial segment increased $65 million, or 7%, in the first quarter of 2024 compared to 2023. Operating margin increased 170 basis points to 44.1% in the first quarter of 2024 compared to 2023. Operating income and operating margin growth in our Financial segment was primarily due to operating leverage and scalable revenue growth, partially offset by a decrease in license and termination fee revenue.

Current wording

Operating income in our Financial segment increased $65 million, or 6%, in the second quarter of 2024 and increased $130 million, or 7%, in the first six months of 2024 compared to 2023. Operating margin increased 10 basis points to 45.9% in the second quarter of 2024 and increased 90 basis points to 45.0% in the first six months of 2024 compared to 2023. Operating income and operating margin growth in our Financial segment was primarily due to operating leverage and scalable revenue growth.

Previous wording

The operating loss in Corporate and Other was relatively consistent in the first quarter of 2024 compared to 2023. The operating loss in the first quarter of 2024 was favorably impacted by a reduction of $58 million in amortization of acquisition-related intangible assets, partially offset by an $18 million increase in severance costs, a $12 million facility impairment, and higher variable compensation.

Current wording

The operating loss in Corporate and Other decreased $95 million in the second quarter of 2024 and decreased $100 million in the first six months of 2024 compared to 2023. The operating losses in the second quarter and first six months of 2024 were favorably impacted by a reduction of $60 million and $118 million in amortization of acquisition-related intangible assets, respectively, partially offset by a $12 million facility impairment in the first six months of 2024.

Previous wording

Interest expense, net increased $59 million, or 29%, in the first quarter of 2024 compared to the first quarter of 2023 due to higher outstanding borrowings, including as a result of our public offering and issuance of $2.0 billion of senior notes in March 2024, as well as increased variable rate borrowings associated with our settlement advance cash program in Latin America in the first quarter of 2024 compared to the first quarter of 2023.

Current wording

Interest expense, net increased $53 million, or 23%, in the second quarter of 2024 compared to 2023 and increased $112 million, or 26%, in the first six months of 2024 compared to 2023 due to higher outstanding borrowings, including as a result of our public offering and issuance of $2.0 billion of senior notes in March 2024, as well as increased variable rate borrowings associated with our settlement advance cash program in Latin America compared to the prior year periods.

Previous wording

Other expense, net decreased $13 million in the first quarter of 2024 compared to 2023. Other expense, net includes foreign currency transaction gains and losses, gains or losses from a sale or change in fair value of investments in certain equity securities, and amounts related to debt guarantee arrangements of certain joint ventures. Other expense, net in the first quarter of 2024 included $21 million related to a gain on the remeasurement of certain equity securities. Net foreign currency transaction losses increased $9 million in the first quarter of 2024, primarily related to our Argentina subsidiary.

Current wording

Other expense, net decreased $21 million in the second quarter of 2024 and decreased $34 million in the first six months of 2024 compared to 2023. Other expense, net includes foreign currency transaction gains and losses, gains or losses from a sale or change in fair value of investments in certain equity securities, and amounts related to debt guarantee arrangements of certain joint ventures. Other expense, net in the second quarter and first six months of 2024 included $6 million and $27 million, respectively, related to gains on the sale and remeasurement of certain equity securities. Net foreign currency transaction losses decreased $10 million and $1 million in the second quarter and first six months of 2024 compared to the second quarter and first six months of 2023, respectively.

Previous wording

Income tax provision as a percentage of income before income taxes and loss from investments in unconsolidated affiliates was 16.7% and 17.4% for the three months ended March 31, 2024 and 2023, respectively. The effective income tax rate for both the three months ended March 31, 2024 and 2023 included discrete tax benefits from equity compensation.

Current wording

Income tax provision as a percentage of income before income taxes and income (loss) from investments in unconsolidated affiliates was 19.4% and 20.7% for the three months ended June 30, 2024 and 2023, respectively, and was 18.2% and 19.2% for the six months ended June 30, 2024 and 2023, respectively. The effective income tax rate for each of the six months ended June 30, 2024 and 2023 included discrete tax benefits from equity compensation.

Previous wording

Our share of net losses from unconsolidated affiliates accounted for using the equity method is reported as loss from investments in unconsolidated affiliates, and the related tax benefit is reported within the income tax provision in the consolidated statements of income. Loss from investments in unconsolidated affiliates, including acquired intangible asset amortization from valuations in purchase accounting, was $(8) million and $(12) million in the first quarter of 2024 and 2023, respectively.

Current wording

Our share of net income (loss) from unconsolidated affiliates accounted for using the equity method is reported as income (loss) from investments in unconsolidated affiliates, and the related tax benefit is reported within the income tax provision in the consolidated statements of income. Income (loss) from investments in unconsolidated affiliates, including acquired intangible asset amortization from valuations in purchase accounting, was $(8) million and $3 million in the second quarter of 2024 and 2023, respectively, and $(16) million and $(9) million in the first six months of 2024 and 2023, respectively.

Previous wording

Net income attributable to noncontrolling interests and redeemable noncontrolling interest relates to the minority partners’ share of the net income in our consolidated subsidiaries. Net income attributable to noncontrolling interests, including acquired intangible asset amortization from valuations in purchase accounting, was $17 million and $13 million in the first quarter of 2024 and 2023, respectively.

Current wording

Net income attributable to noncontrolling interests and redeemable noncontrolling interest relates to the minority partners’ share of the net income in our consolidated subsidiaries. Net income attributable to noncontrolling interests, including acquired intangible asset amortization from valuations in purchase accounting, was $15 million and $12 million in the second quarter of 2024 and 2023, respectively, and $32 million and $25 million in the first six months of 2024 and 2023, respectively.

Previous wording

Net income attributable to Fiserv, Inc. per share-diluted was $1.24 and $0.89 in the first quarter of 2024 and 2023, respectively. In addition to the favorable impacts to net income attributable to Fiserv, Inc. described above, our diluted weighted average outstanding shares were reduced by 6% in the first quarter of 2024 compared to the first quarter of 2023, due to our share repurchase program.

Current wording

Net income attributable to Fiserv, Inc. per share-diluted was $1.53 and $1.10 in the second quarter of 2024 and 2023, respectively, and was $2.76 and $1.99 in the first six months of 2024 and 2023, respectively. In addition to the favorable impacts to net income attributable to Fiserv, Inc. described above, our diluted weighted average outstanding shares were reduced by 5% and 6% in the second quarter and first six months of 2024, respectively, compared to 2023, due to our share repurchase program.

Previous wording

Our primary liquidity needs in the ordinary course of business are to: (i) fund normal operating expenses; (ii) meet the interest and principal requirements of our outstanding indebtedness, including finance leases; and (iii) fund capital expenditures and operating lease payments. We believe these needs will be satisfied in both the short and long term using cash flow generated by our operations, along with our cash and cash equivalents of $1.2 billion, proceeds from the issuance of U.S. dollar and Euro commercial paper, and available capacity under our revolving credit facility of $2.7 billion (net of $3.3 billion of capacity designated for outstanding borrowings under our commercial paper programs, senior notes due in 2024 and letters of credit) at March 31, 2024.

Current wording

Our primary liquidity needs in the ordinary course of business are to: (i) fund normal operating expenses; (ii) meet the interest and principal requirements of our outstanding indebtedness, including finance leases; and (iii) fund capital expenditures and operating lease payments. We believe these needs will be satisfied in both the short and long term using cash flow generated by our operations, along with our cash and cash equivalents of $1.2 billion, proceeds from the issuance of U.S. dollar and Euro commercial paper, and available capacity under our revolving credit facility of $1.1 billion (net of $4.9 billion of capacity designated for outstanding borrowings under our commercial paper programs, senior notes due within the next twelve months and letters of credit) at June 30, 2024.

Previous wording

We maintain investments in various affiliates that are accounted for as equity method investments. Total distributions from unconsolidated affiliates, including those classified as cash flows from investing activities, were $30 million and $45 million in the first three months of 2024 and 2023, respectively.

Current wording

We maintain investments in various affiliates that are accounted for as equity method investments. Total distributions from unconsolidated affiliates, including those classified as cash flows from investing activities, were $58 million and $109 million in the first six months of 2024 and 2023, respectively.

Previous wording

Our current policy is to use our operating cash flow primarily to fund capital expenditures, share repurchases, acquisitions and to repay debt rather than to pay dividends. Our capital expenditures were approximately 9% and 7% of our total revenue for the first three months of 2024 and 2023, respectively.

Current wording

Our current policy is to use our operating cash flow primarily to fund capital expenditures, share repurchases, acquisitions and to repay debt rather than to pay dividends. Our capital expenditures were approximately 8% and 7% of our total revenue for the first six months of 2024 and 2023, respectively.

Previous wording

We repurchased $1.5 billion of our common stock during both the first three months of 2024 and 2023. On February 22, 2023, our board of directors approved a repurchase authorization for up to 75.0 million shares of our common stock. As of March 31, 2024, we had approximately 41.7 million shares remaining under our existing repurchase authorization. Shares repurchased are generally held for issuance in connection with our equity plans.

Current wording

We repurchased $3.0 billion and $2.5 billion of our common stock during the first six months of 2024 and 2023, respectively. On February 22, 2023, our board of directors approved a repurchase authorization for up to 75.0 million shares of our common stock. As of June 30, 2024, we had approximately 31.8 million shares remaining under our existing repurchase authorization. Shares repurchased are generally held for issuance in connection with our equity plans.

Previous wording

In March 2024, we completed the public offering and issuance of $2.0 billion of senior notes, comprised of $750 million aggregate principal amount of 5.150% senior notes due in March 2027, $500 million aggregate principal amount of 5.350% senior notes due in March 2031 and $750 million aggregate principal amount of 5.450% senior notes due in March 2034. We used the net proceeds from this senior notes offering for general corporate purposes, including the repayment of a portion of our commercial paper notes and for share repurchases, and expect to use a portion of the net proceeds from this senior notes offering to repay a portion of our 2.750% senior notes upon maturity in July 2024.

Current wording

In March 2024, we completed the public offering and issuance of $2.0 billion of senior notes, comprised of $750 million aggregate principal amount of 5.150% senior notes due in March 2027, $500 million aggregate principal amount of 5.350% senior notes due in March 2031 and $750 million aggregate principal amount of 5.450% senior notes due in March 2034. We used the net proceeds from this senior notes offering for general corporate purposes, including the repayment of a portion of our commercial paper notes and for share repurchases, and in July 2024, the repayment of a portion of our 2.750% senior notes.

Previous wording

At March 31, 2024, our debt consisted primarily of $22.0 billion of fixed-rate senior notes and $1.3 billion of outstanding borrowings under our commercial paper programs. Interest on our U.S. dollar-denominated senior notes is paid semi-annually, while interest on our Euro and British Pound-denominated senior notes is paid annually. Interest on our revolving credit facility and commercial paper notes is generally paid weekly, or more frequently on occasion.

Current wording

At June 30, 2024, our debt consisted primarily of $22.0 billion of fixed-rate senior notes and $1.9 billion of outstanding borrowings under our commercial paper programs. Interest on our U.S. dollar-denominated senior notes is paid semi-annually, while interest on our Euro and British Pound-denominated senior notes is paid annually. Interest on our revolving credit facility and commercial paper notes is generally paid weekly, or more frequently on occasion.

Previous wording

At March 31, 2024, the 2.750% senior notes due in July 2024 were classified in the consolidated balance sheet as long-term, as we have the intent to refinance this debt on a long-term basis, and the ability to do so under our revolving credit facility and through use of a portion of the net proceeds from the March 2024 issuance of the senior notes as described above. Outstanding borrowings under the commercial paper programs are also classified in the consolidated balance sheet as long-term, as we have the intent to refinance this commercial paper on a long-term basis through the continued issuance of new commercial paper upon maturity, and also have the ability to refinance such commercial paper under our revolving credit facility.

Current wording

At June 30, 2024, the 2.750% senior notes due in July 2024 and 3.850% senior notes due in June 2025 were classified in the consolidated balance sheet as long-term, as we have either subsequently refinanced or have the intent to refinance this debt on a long-term basis, and the ability to do so under our revolving credit facility. Outstanding borrowings under the commercial paper programs are also classified in the consolidated balance sheet as long-term, as we have the intent to refinance this commercial paper on a long-term basis through the continued issuance of new commercial paper upon maturity, and also have the ability to refinance such commercial paper under our revolving credit facility.

Previous wording

We maintain certain short-term lines of credit and other borrowing arrangements with foreign banks and alliance partners primarily to fund settlement activity associated with operations in Latin America. We entered into an annually renewable term loan facility, which was fully funded in April 2023, to fund settlement advance cash payments in Brazil. This term loan has a notional value of 514 million Brazilian real ($103 million USD equivalent) at March 31, 2024 and bears interest at a variable Certificado de Depósito Interbancário (CDI) Rate, plus a specified margin per annum. In February 2024, this term loan facility was amended, which amendment extended its maturity date to April 2025 and decreased the specified margin to 1.25% per annum.

Current wording

We maintain various short-term lines of credit and other borrowing arrangements with foreign banks and alliance partners primarily to fund settlement activity associated with operations in Latin America, including an annually renewable term loan facility to fund settlement advance cash payments in Brazil. This term loan has a notional value of 514 million Brazilian real ($93 million USD equivalent) at June 30, 2024 and bears interest at a variable Certificado de Depósito Interbancário (CDI) Rate, plus a specified margin per annum. In February 2024, this term loan facility was amended, which amendment extended its maturity date to April 2025 and decreased the specified margin to 1.25% per annum.

Previous wording

During the first three months of 2024, we were in compliance with all financial debt covenants. Our ability to meet future debt covenant requirements will depend on our continued ability to generate earnings and cash flows. We expect to remain in compliance with all terms and conditions associated with our outstanding debt, including financial debt covenants.

Current wording

During the first six months of 2024, we were in compliance with all financial debt covenants. Our ability to meet future debt covenant requirements will depend on our continued ability to generate earnings and cash flows. We expect to remain in compliance with all terms and conditions associated with our outstanding debt, including financial debt covenants.

Previous wording

We maintain noncontrolling ownership interests in Sagent M&C, LLC and defi SOLUTIONS Group, LLC (collectively, the “Lending Joint Ventures”). The Lending Joint Ventures maintain variable-rate term loan facilities with aggregate outstanding borrowings of $437 million in senior unsecured debt at March 31, 2024 and variable-rate revolving credit facilities with an aggregate borrowing capacity of $83 million with a syndicate of banks, which mature in April 2027. There were $52 million of aggregate outstanding borrowings on the revolving credit facilities at March 31, 2024. We have guaranteed the debt of the Lending Joint Ventures. We maintained a liability of $28 million at March 31, 2024 for the estimated fair value of our non-contingent obligations to stand ready to perform over the term of the guarantee arrangements. Such guarantees will be amortized in future periods over the contractual term of the debt. In addition, we maintained a contingent liability of $22 million at March 31, 2024, representing the current expected credit losses to which we are exposed. This contingent liability is estimated based on certain financial metrics of the Lending Joint Ventures and historical industry data, which is used to develop assumptions of the likelihood the guaranteed parties will default and the level of credit losses in the event a default occurs. We have not made any payments under the guarantees, nor have we been called upon to do so, and do not anticipate that the Lending Joint Ventures will fail to fulfill their debt obligations.

Current wording

We maintain noncontrolling ownership interests in Sagent M&C, LLC and defi SOLUTIONS Group, LLC (collectively, the “Lending Joint Ventures”). The Lending Joint Ventures maintain variable-rate term loan facilities with aggregate outstanding borrowings of $432 million in senior unsecured debt at June 30, 2024 and variable-rate revolving credit facilities with an aggregate borrowing capacity of $83 million with a syndicate of banks, which mature in April 2027. There were $19 million of aggregate outstanding borrowings on the revolving credit facilities at June 30, 2024. We have guaranteed the debt of the Lending Joint Ventures. We maintained a liability of $26 million at June 30, 2024 for the estimated fair value of our non-contingent obligations to stand ready to perform over the term of the guarantee arrangements. Such guarantees will be amortized in future periods over the contractual term of the debt. In addition, we maintained a contingent liability of $19 million at June 30, 2024, representing the current expected credit losses to which we are exposed. This contingent liability is estimated based on certain financial metrics of the Lending Joint Ventures and historical industry data, which is used to develop assumptions of the likelihood the guaranteed parties will default and the level of credit losses in the event a default occurs. We have not made any payments under the guarantees, nor have we been called upon to do so, and do not anticipate that the Lending Joint Ventures will fail to fulfill their debt obligations.